Did you pay for college in 2014? If you did it can mean tax savings on your federal tax return. There are two education credits that can help you with the cost of higher education. The credits may reduce the amount of tax you owe on your tax return. Here are some important facts you should know about education tax credits.

American Opportunity Tax Credit:

  • You may be able to claim up to $2,500 per eligible student.
  • The credit applies to the first four years at an eligible college or vocational school.
  • It reduces the amount of tax you owe. If the credit reduces your tax to less than zero, you may receive up to $1,000 as a refund.
  • It is available for students earning a degree or other recognized credential.
  • The credit applies to students going to school at least half-time for at least one academic period that started during the tax year
  • Costs that apply to the credit include the cost of tuition, books and required fees and supplies.

Lifetime Learning Credit:

  • The credit is limited to $2,000 per tax return, per year.
  • The credit applies to all years of higher education. This includes classes for learning or improving job skills.
  • The credit is limited to the amount of your taxes.
  • Costs that apply to the credit include the cost of tuition, required fees, books, supplies and equipment that you must buy from the school.

For both credits:

  • The credits apply to an eligible student. Eligible students include yourself, your spouse or a dependent that you list on your tax return.
  • You must file Form 1040A or Form 1040 and complete Form 8863, Education Credits, to claim these credits on your tax return.
  • Your school should give you a Form 1098-T, Tuition Statement, showing expenses for the year. This form contains helpful information needed to complete Form 8863. The amounts shown in Boxes 1 and 2 of the form may be different than what you actually paid. For example, the form may not include the cost of books that qualify for the credit.
  • You can't claim either credit if someone else claims you as a dependent.
  • You can't claim both credits for the same student or for the same expense, in the same year.
  • The credits are subject to income limits that could reduce the amount you can claim on your return.
  • Visit IRS.gov and use the Interactive Tax Assistant tool to see if you're eligible to claim these credits. Also visit the IRS Education Credits Web page to learn more. If you can't claim a tax credit, check the other tax benefits you might be able to claim.

You can also learn more about college tax benefits with TaxAct's College Tax Whiz.

Ready to file? TaxAct Free Federal Edition's Q&A interview covers all college-related tax benefits to maximize your deductions and credits. Start your Free Federal tax return now.

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Upcoming Tax Dates

February 10 — Social security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2017. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

February 10 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Federal unemployment tax
File Form 940 for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Employees who work for tips
If you received $20 or more in tips during January, report them to your employer Details

February 15 — All businesses
Give annual information statements to recipients of certain payments you made during 2017 Details

February 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in January.

February 15 — All employers
Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2017, but did not give you Form W4 to continue the exemption this year.

February 15 — Individuals
If you claimed exemption from income tax withholding last year on the Form W-4, you must file a new Form W-04 by this date to continue your exemption for another year Details

February 19 — Everyone
Federal Holiday (Washington's Birthday) Details

February 28 — All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2017.

February 28 — Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2017. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to 03-31. The due date for giving the recipient these forms remains 01-31.

February 28 — All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2017. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to 03-31. The due date for giving the recipient these forms remains 01-31.

February 28 — Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to 03-31.

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